[opendtv] Analysis: They're going to CES
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 6 Jan 2005 08:13:11 -0500
My how times have changed in the "video" business...
When I worked at Grass Valley in the early '80s,=20
there were only a few places to go to get useful=20
info about the directions the video industry was=20
growing. NAB was and still is "Mecca" for video=20
equipment manufacturers. One could go to NAB and=20
see exactly where television was going , because=20
Broadcasting WAS television. Cable was just=20
starting to have an impact on broadcasters.=20
Innovation was primarily being driven by a=20
handful of big customers...i.e. the Networks, who=20
had run their own R&D labs for decades. And=20
innovations were primarily related to what one=20
could do to manipulate a good old SDTV image, or=20
to acquire or record these images with higher=20
quality at lower prices.
I came to Grass Valley to develop a new market.=20
At the time it was called Educational and=20
Industrial TV, or business and institutional=20
video, or corporate video. This stuff was=20
beginning to bubble up at NAB, however if you=20
really wanted tu understand these emerging=20
markets, you went to smaller regional shows and=20
shows that were put together by your dealers. Or=20
you went and visited some of the early pioneering=20
facilities that were trying to use new lower cost=20
gear to produce NON-Broadcast video.
One major show that was not on the "radar" was=20
CES. Why bother with the guys who build the TVs.=20
WE controlled innovation. THEY just provided the=20
screens upon which we did our magic. The CE=20
divisions of companies like Sony and Panasonic=20
were irrelevant to us.
We controlled the Vertical
We controlled the Horizontal
CE manufacturers operated near the Outer Limits=20
of an industry that we - and our broadcaster=20
customers - dominated.
We did pay attention to cable; the Western Cable=20
Show was very much on the radar screen. The new=20
cable networks were customers, and the Western=20
Show was where they went to look at equipment.=20
Now it is just a programming affair.
After I left GVG this whole HDTV thing started to=20
bubble up, while cable continued to build its=20
empire. And this whole Desktop Video thing=20
started to get some traction, thanks to the rapid=20
growth of the PC industry. To some it looked like=20
the PC might gobble up everything.
When I got involved in the U.S. Advanced=20
Television process in 1992 it quickly became=20
apparent that the CE industry was making the=20
investments to control the next generation of TV.=20
They dominated the U.S. DTV process (they still=20
do for that matter). Sony and Panasonic could=20
push their agendas on two fronts, providing HD=20
production gear for broadcasters, and HD displays=20
for consumers. They had tremendous influence over=20
technical decisions and standards.
When I attended my first CES in 1993, I expected=20
to see lots of people I knew. I was wrong. Like=20
NAB today, there were hardly ANY broadcasters to=20
be found. The only people I recognized were the=20
folks from the CE industry I was working with on=20
ACATS and ATSC committees.
Within a year or two, however, that picture began=20
to change. Innovation in video production was=20
moving out of the hardware realm into the=20
software realm. Desktop Video changed the way=20
people put TV programs together; it also changed=20
the look of TV, allowing creative types to=20
manipulate images and to composite them in ways=20
that were virtually impossible with a DVE and a=20
Switcher. CES moved onto the radar screen since=20
it was the place to go to see how people would=20
use HDTV and all the other affordable gadgets=20
that were transforming the CE business, including=20
PCs. Equally important, CES is where the big boys=20
went to pontificate about where we were headed.
Bill Gates became a keynote star, trotting out=20
one vision of the future after another. I began=20
to see many familiar faces from what was left of=20
U.S. video equipment manufacturers. One year=20
Microsoft built a "Home of the Future,"=20
demonstrating how digital media content would be=20
shared among various CE and PC devices.
Meanwhile, as I said, the Western Cable Show=20
became a programming forum. The cable industry=20
was now fully entrenched, even as the old media=20
conglomerates began to assimilate the programming=20
that it relies upon. The cable guys had their own=20
equipment vendors; they were effectively keeping=20
the CE industry at bay, even as Congress and the=20
=46CC began to demand they they open up the market=20
for cable set-top boxes.
Then DBS happened.
The CE industry did an end run around cable,=20
working with the DBS systems to build the boxes=20
and to drive innovation. More important, they=20
developed for themselves, and their CE retailer=20
partners, a new source of revenue - spiffs and=20
royalties for every consumer they could sign up=20
for a DBS service.
They did much the same with DVD and HDTV. They=20
controlled the MPEG-2 process and turned MPEG-2=20
into a huge new royalty stream. They controlled=20
DVD and established a precedent of paying=20
royalties for a technology, as part of the cost=20
of the content. And CE retailers cashed in on the=20
ability to sell DVD content, bypassing cable and=20
broadcast distribution.
What the CE industry did NOT do was help build a=20
market for broadcast DTV. They did not need to;=20
the broadcasters were only too happy to let the=20
CE industry push the HDTV ball while broadcasters=20
continue to milk NTSC.
With help from their DBS partners, the CE=20
industry began to drive innovation in TV. When=20
they offered NVOD the cable industry was forced=20
to respond. When they added PVRs to their boxes,=20
the cable industry was forced to respond. When=20
they started to offer interactive services the=20
cable industry was forced to respond.
As you will learn in the story that follows, CES=20
is NOW on the radar screens of the Cable=20
industry. The article tells you what these folks=20
are going to be looking for in Las Vegas. It=20
SHOULD tell you something about where we are=20
headed, despite all of the nay saying from some=20
of the curmudgeons on this list that this=20
convergence thing will never happen...
Regards
Craig
My how things have changed
January 5, 2005 10:05am
Multichannel News
Two years ago, ESPN sent four people to the=20
Consumer Electronics Show. Last year, they sent=20
20. Later this week, when the 2005 CES opens=20
(Jan. 5-9), ESPN will have more than 70 people in=20
attendance.
True, the company will be launching the HDTV feed=20
for ESPN2, but the sharp spike in attendance is=20
emblematic of a larger trend: cable programmers=20
find consumer electronics a key growth area for=20
their companies.
The interest is being returned. CES invited MTV=20
Networks president Judith McGrath to be a keynote=20
speaker. This is believed to be the first time a=20
cable programming executive has delivered a major=20
address to the CE crowd.
Cable & Telecommunications Association for=20
Marketing has split its annual tour of the floor=20
into two sessions for the first time this year,=20
with a separate programming version scheduled for=20
Jan. 7, a day after CTAM's MSO marketing and=20
business development types cruise the aisles.=20
(Cable Television laboratories Inc. also will=20
provide a tour for senior MSO and engineering=20
executives.)
=46or ESPN, the CES has grown in importance because=20
"we are becoming a retail-oriented brand," says=20
Bryan Burns, vice president of strategy business=20
planning and development at ESPN, "totally=20
related to CE space."
And ESPN is pulling out all the stops. It is=20
co-sponsoring the grand lobby stage in the main=20
entrance to the Las Vegas Convention Center.=20
"That's a huge message," says Burns.
As for the consumer gear at CES, ESPN has many=20
touch points, including HDTV, direct-broadcast=20
satellite, broadband and wireless devices, for=20
not only programming but branded ESPN=20
merchandise. The company recently announced a=20
branded wireless phone venture with Sprint Corp.=20
ESPN branded merchandise can even show up in=20
boats, courtesy of its outdoor division, Burns=20
says.
"We take all our various brands [to CES]," Burns=20
says. "It's how our company is embracing consumer=20
electronics, because it is our future."
ESPN2 launches in HD on Jan. 6, with three=20
college basketball games. As part of the launch=20
of ESPN2 in HD, ESPN has invited consumers to go=20
online and vote which game they'd like basketball=20
analyst Dick Vitale to broadcast from that day.=20
The "Send Dick V Packing!" promotion provides=20
three choices: the Memphis at Texas game, DePaul=20
at Cincinnati or Gonzaga at Santa Clara. The=20
selection was scheduled to be announced Jan. 1.=20
ESPN2 will carry 82 HD contests in the first 83=20
days of 2005.
The network is also hosting a reception and=20
screening at CES for its latest original program,=20
the series Tilt , a behind-the-scenes look at=20
poker, which premieres Jan. 13.
HD also is on The Weather Channel's radar. Susan=20
Scott, the network's senior vice president of=20
distribution, says her team will study HDTV=20
trends, as it looks to add HD long form=20
programming.
=46or the first time in several years, Scott won't=20
attend CES due to her responsibilities as=20
chairman of Women in Cable & Telecommunications,=20
but she's sending a team. In addition to HD, TWC=20
has a particular interest in home networking.
"We're trying to get an understanding what are=20
the options for our distribution customers=20
because of weather.com ," she says. "I've also=20
got my people going to mobile electronics areas.=20
And we're very interested in emerging=20
technologies. We want to understand whether it is=20
possible and viable to have voicemail delivered=20
aurally via TV."
She adds that TWC is trying to limit where its=20
on-demand services and interactivity can go.
Kevin Cohen, senior vice president and general=20
manager of interactive and enhanced TV at Turner=20
Cable Network Sales, is a CES veteran. He has a=20
long list of items on his activity list. "We'll=20
be seeing what's on the horizon with=20
time-shifting devices, in the linear and=20
nonlinear space. We'll see what types of success=20
the Moxie folks are having and any new additions=20
to Motorola [Inc.] set-tops, multi-tuner [digital=20
video recorders], and the Hewlett Packard [Co.]=20
multimedia center that runs the Microsoft media=20
center."
Also on the list: devices with WiFi built into=20
them, Internet protocol-based set-top boxes, TiVo=20
Inc.'s next generation set-tops and devices that=20
access content through broadband connections.=20
Turner has signed a deal with one such company,=20
Akimbo Systems. "We'll see what else is out=20
there," Cohen says.
"We'll see what affiliates are looking at to=20
expand their [video-on-demand] offerings, and=20
what new types of VOD services are on the=20
horizon," he says. Cohen says he believed it's=20
too early to tell if telco IPTV deployments will=20
be successful. "We're not going to know about=20
that for quite some period of time. The telcos=20
have a bit of an uphill battle, just getting=20
their system set up," Cohen says.
Wireless has been a key technology at Turner for=20
years, particularly at Cable News Network. The=20
network has delivered content to cell phones and=20
short message service phones for years. In the=20
past year, it struck a deal to send video clips=20
as part of a subscription service to Sprint=20
subscribers.
Consumers can pay $4.95 a month and get access to=20
20 to 30 video clips a day, ranging in length=20
from 30 seconds to two minutes, says Bill=20
Stratton, vice president at TCNS. "We're pleased=20
with CNN on the phone," he says. The network also=20
sells short-form content from Cartoon Network and=20
Adult Swim, for $3.95 a month each, on those=20
phones.
There are 15 to 25 clips with each service, on=20
the one-minute range. "We're very pleased with=20
how that is doing," Stratton says.
Better wireless broadband services, including=20
evolution data only (EVDO) and 3G, are in the=20
offing. "At CES we'll be looking at different=20
form functions of devices that are out there,"=20
Stratton says. "Screens on phones have certain=20
aspect ratios. We want to begin to understand=20
aspect ratios, because it's very different from=20
TV. That's one of the bigger challenges."
Cohen also will take stock of interactive TV.=20
Turner has dabbled with a number of news and=20
entertainment ITV functions, both on the TV and=20
with wireless devices.
"I'm very encouraged about enhanced TV and ITV,"=20
he says. "ITV gaming will be big opportunity in=20
2005," he says, citing Cartoon Network's gaming=20
success in the United Kingdom. "It could become=20
more and more a reality in this marketplace. The=20
DBS folks are putting out set-top boxes with=20
middleware that can do enhanced TV. There is a=20
fair amount of experimentation with one-screen=20
interactivity with key affiliates. It's all about=20
finding the right content for this platform."
One idea is to provide some of the massive=20
amounts of information on cnn.com to ITV users.=20
On election night alone, there were 650 million=20
page views to cnn.com, Cohen says. "We could take=20
a relevant portion of that content and make that=20
available while they are watching our network."
Portable video devices are another frontier.=20
"Arcos has a portable media player," Cohen says,=20
"although it's still a little bit kludgy. There=20
are gaming devices that also playback video. We=20
want to understand the portable video space."
HDTV, broadband content and VOD will be major=20
targets for Albert Cheng, senior vice president=20
of business strategy and development for Disney=20
and ESPN Networks Affiliate Sales and Marketing.
"Unlike other cable shows, what CES brings for us=20
is a view of what CE companies are trying to=20
develop for the consumer," Cheng says.
"The main push is HD," he says, echoing Burns' sentiment with ESPN2.
They are also looking into the continued=20
evolution of mobile content, including delivery=20
to automobiles. "We're going to see where that's=20
going."
"There is also broadband and home networking," he=20
says, noting that The Walt Disney Co. has the=20
Disney Connection, ESPN Broadband and ABC News=20
broadband content. "We get a lot of usage," he=20
says, across those services, all enabled by=20
broadband."
Copyright =A9 2005 Reed Business Information. All Rights Reserved.
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